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Poverty and Profit in the American City
Matthew Desmond
read on February 28, 2019

This was a really great book, not only about poverty, but about the relationship between the rich and the poor. About how poverty is a way of life, not a metric, or a temporary condition. The book tracks several families and people in Milwakee in the early 2010s, but there's nothing about it that wouldn't be true everywhere. The real strength of the book is Desmond's empathy. The book is a collection of stories that he's put together over years of living with the poor, and his reporting from their perspective is effective in ways I didn't expect.

For me there were a few key understandings.

Residential stability is the bedrock of most other forms of stability and well-being. Where you live, and the stability of that situation, generally determines where you can work, and the income that you have access to. This is especially true for the poor, who have unreliable transportation, or rely on public transportation. It determines who your friends are - not only in terms of who you is generally around you, but it alters your ability and desire to invest in those relationships. If you might be moving at any moment, there is less reason to meet your neighbors, to clean up the neighborhood, to invest in and maintain your community. This lack of community investment is devastating - it makes a huge difference in the neighborhood once a certain critical mass of people have this "no investment" mentality. It is especially hard on children, who will be removed entirely from their friend group, their schools, etc. Unplanned moves will set children back severely in their education and social development, which obviously does not prepare them for success later on.

The people in this book experience poverty as a permanent condition. They are not hopeful that they will someday escape it, or that they will be wealthy or even middle class. They typically come from poverty, and are surrounded by poverty, and simply don't seem to waste energy thinking that it can be any other way for them. This leads them to act in ways that are frustratingly short-sighted, like blowing a month of food stamps on a lobster dinner, or refusing to sell your jewelry to avoid an eviction. When you know that you're going to be poor for the rest of your life - why bother saving? Why not enjoy an indulgence on the few opportunities you have to enjoy them? This is, of course, a self fulfilling prophecy, but Desmond describes it with such empathy that it really hits home.

A few more notes:

  • SSI (welfare) has a resource limit of $2,000 - meaning that if you have more than that much in your bank account, SSI will stop paying. Huge effing surprise that this incentivizes the poor not to save money. Desmond tells stories in the book where, upon coming by some unexpected cash it is immediately spent on layaway items, which are viewed as "savings", because in the bank account cash is literally a liability. While I'm sure this resource limit was well intentioned, holy hell is that dumb.
  • I was blown away by the Milwakee real estate market, post financial collapse (~2009). Desmond tracks a landlord who buys entire homes in poor neighborhoods for less than $10,000 or $20,000 routinely. She would then repair them for ~$2,000 more, and rent them out for $800/mo. No kidding. She would have a full mortgage repaid, using only rent cashflow, in under 2 years. After that it's 100% cashflow profit. That is insane. The cost, of course, is that you're dealing with awful neighborhoods, and very poor tenants. High eviction rates, high wear-and-tear, etc. But still. Slum-lording is disgustingly profitable. 
  • If police are called to an address too many times, they'll issue a nuisance order to the homeowner. This will cost the landlord money, who will then either raise rents or evict the "problem" tenant. (Even if the source of the disturbance wasn't the tenant themselves). This, of course, leads to poor tenants (particularly women in abusive relationships) never calling the police and getting help, because they know that there is a real chance of eviction if they do.


Author Bio:

Matthew Desmond is a professor of sociology at Princeton University. After receiving his Ph.D. in 2010 from the University of Wisconsin at Madison, he joined the Harvard Society of Fellows as a Junior Fellow. He is the author of four books, including Evicted: Poverty and Profit in the American City (2016), which won the Pulitzer Prize, National Book Critics Circle Award, and Carnegie Medal, and PEN / John Kenneth Galbraith Award for Nonfiction. The principal investigator of The Eviction Lab, Desmond’s research focuses on poverty in America, city life, housing insecurity, public policy, racial inequality, and ethnography. He is the recipient of a MacArthur “Genius” Fellowship, the American Bar Association’s Silver Gavel Award, and the William Julius Wilson Early Career Award. A contributing writer for the New York Times Magazine, Desmond was listed in 2016 among the Politico 50, as one of “fifty people across the country who are most influencing the national political debate.”